ISU Profs Offers Thoughts on Shrinking Middle Class
By: Jon Swaner
Updated: February 21, 2013
In the late 1960's, the wealthiest Americans had only 10% of the entire nation's income.
Now, the top 1% makes 25% of the money in America, & the middle class is shrinking.
It's no secret. The gap between the have's and the have not's has dramatically increased since the 70's.
So what caused this gap?
To find the answer, you have to go back in time 70 years.
The United States had a large middle class shortly after World War II.
"Your ticket to the middle class as an employee is to finish high school and go to work in a union shop of a manufacturing environment," said ISU Economist Robert Guell.
Guell says the US was the manufacturing center of the world... exporting everything to everyone.
In those days, America dominated the world's market share.
"We had market power that we'll never see again and that we got it for a completely horrific reason. The rest of the world was flattened and 50 million people were dead," said Guell.
But the rest of the world recovered from WW2.
In fact, what were once good US jobs began moving overseas.
That's when Americans turned to the bachelor's degree as the ticket to the middle class.
"If you got your undergraduate degree, you could work for a financial services corporation or in a scientific lab or in a university or any large entity," said Guell.
ISU Sociology Professor Tom Steiger says when women entered the workforce, that prolonged better days for the middle class.
"So you started seeing two income families, which for a household level sort of off-set the effects. If that had not happened, we would have seen this hollowing out much sooner," said Steiger.
That hollowing out of the middle class is happening now.
Why? Both Guell and Steiger agree the 4 year degree is no guarantee to one's financial stability.
"And we haven't replaced it with anything. We're in a time of severe uncertainty of what is the ticket that gets you into this group?" Guell asks.
"The reality is a lot of students are working full-time. It takes them 10 years, but that's 10 years of lost wages. That's 10 years of going into debt. It takes away fro mthe middle class. If they have 40-thousand dollars of debt, that's like paying off a house," said Steiger.
Also, in the 50's, Americans got married sooner in life and had children later.
We're seeing the exact opposite today.
When people are having children at younger ages, they typically don't have the income to properly support children.
Now, the top 1% makes 25% of the money in America, & the middle class is shrinking.
It's no secret. The gap between the have's and the have not's has dramatically increased since the 70's.
So what caused this gap?
To find the answer, you have to go back in time 70 years.
The United States had a large middle class shortly after World War II.
"Your ticket to the middle class as an employee is to finish high school and go to work in a union shop of a manufacturing environment," said ISU Economist Robert Guell.
Guell says the US was the manufacturing center of the world... exporting everything to everyone.
In those days, America dominated the world's market share.
"We had market power that we'll never see again and that we got it for a completely horrific reason. The rest of the world was flattened and 50 million people were dead," said Guell.
But the rest of the world recovered from WW2.
In fact, what were once good US jobs began moving overseas.
That's when Americans turned to the bachelor's degree as the ticket to the middle class.
"If you got your undergraduate degree, you could work for a financial services corporation or in a scientific lab or in a university or any large entity," said Guell.
ISU Sociology Professor Tom Steiger says when women entered the workforce, that prolonged better days for the middle class.
"So you started seeing two income families, which for a household level sort of off-set the effects. If that had not happened, we would have seen this hollowing out much sooner," said Steiger.
That hollowing out of the middle class is happening now.
Why? Both Guell and Steiger agree the 4 year degree is no guarantee to one's financial stability.
"And we haven't replaced it with anything. We're in a time of severe uncertainty of what is the ticket that gets you into this group?" Guell asks.
"The reality is a lot of students are working full-time. It takes them 10 years, but that's 10 years of lost wages. That's 10 years of going into debt. It takes away fro mthe middle class. If they have 40-thousand dollars of debt, that's like paying off a house," said Steiger.
Also, in the 50's, Americans got married sooner in life and had children later.
We're seeing the exact opposite today.
When people are having children at younger ages, they typically don't have the income to properly support children.
